Analyst Conference Summary

conference date: October 30, 2025 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2025 (third quarter, Q3 2025)

Forward-looking statements

Overview: Exceeded guidance, but still not growing y/y.

Basic data (GAAP):

Revenue was $1.08 billion, up 2% sequentially from $1.06 billion and flat from $1.08 billion in the year-earlier quarter.

Net income was $150 million, down 45% sequentially from $235 million, and 77% down from $642 million year-earlier.

Diluted EPS was $0.98, down 34% sequentially from $1.49, and down 76% from $4.03 year-earlier.

Guidance:

Revised 2025 guidance to: rest of world revenue up 0.5% to 1.5% y/y. China revenue $220 milion (was $200 million). Overall revenue $4.27 to $4.31 billion (down about 1% y/y). Diluted non-GAAP EPS $4.65 to $4.75.

Conference Highlights:

Jacob Thaysen, CEO, said "I am pleased to announce that the Illumina team delivered Q325 results that exceeded the high-end of our guidance range for revenue and earnings, driven by revenue acceleration in clinical, our largest market segment. During the quarter, we returned to growth ex-China and are executing on our strategic pillars that support our long-range financial targets." Clinical end market continues to accelerate. Seeing double-digit revenue growth outside of China for consumables.

In Q3 2025 Illumina launched the 5-base solution for simultaneous genomic and epigenomic insights. Introduced Constellation mapped read technology, uncovering hard-to-see genomic variants in GeneDx pilot. Illumina Protein Prep was introduced for driving deeper proteomic insights to enhance drug discovery. BioInsight launched to accelerate technology and data-driven discovery initiatives.

Alnylam Pharmaceuticals (ALNY) was welcomed to the Alliance for Genomic Discovery (AGD), broadening the consortium's clinical genomic dataset to inform the development of gene silencing medicines.

In Q3 2025 Illumina launched TruSight Oncology 500 version 2 (TSO 500 v2), an updated version of Illumina's comprehensive genomic profiling assay for cancer research. Illumina entered into a definitive agreement with Standard BioTools to acquire SomaLogic. PromoterAI, a new AI algorithm that accurately deciphers pathogenic regulatory genetic variants in the noncoding regions of the human genome was introduced and launched DRAGEN v. 4.4 software for clinical oncology research.

Continuing to expand in proteomics, including the SomaLogic acquisition. Will pay $350 million in cash and up to $75 million in near-term milestones. Should close in H1 2026. Expects profitability in 2027.

Product revenue was $927 million, services $157 million. $104 million of the product revenue was for instruments, $707 was for consumables.

Illumina shipped >55 NovaSeq X instruments in Q3 2025. [NovaSeq X is the most powerful and expensive of its sequencers.] In Q3 78% of sequence volumes were done on X systems, representing 51% of consumable revenue.

Expects end markets in 2026 to look similar to 2H 2025.

Non-GAAP numbers: net income $206 million, up 10% sequentially from $187 million, and up 14% from $181 million year-earlier. Diluted EPS was $1.34, up 13% sequentially from $1.19, and up 18% from $1.14 year-earlier.

Cash, equivalents and investment balance was $1.28 billion, up sequentialy from $1.15 billion. $1.0 billion term debt. Cash flow from operations was $284 million. Free cash flow was $253 million. Capital expenditures were $31 million. Cash used to repurchase stock was $120 million.

GAAP cost of revenue was $351 million, leaving gross profit of $733 million. Operating expenses were $506 million, consisting of: $229 million for research and development; $277 million for selling, general, and administration. Leaving income from operations of $227 million. Other expense was $7 million. Income tax $70 million.

Illumina retains a 14.5% stake in Grail.

Q&A selective summary:

China in 2026? Pleased with Q3 performance, now able to serve our OEM partners with instruments. Customers want to work with Illumina. We need to find a way to resolve the situation with regulators.

Freezing on research side of market? No guidance yet. Clinical will be the growth driver. Some contribution from new multiomics products.

Further margin reduction? We think we can further expand our margins. We continue to work on optimizing our manufacturing.

We are not seeing catch up spending from NIH customers yet. We have seen grants given, but not being spent yet. Researchers are feeling the unpredictability. Multiomics should help going forward.

Roche and other competition? We have always had competition. We love competition. Most are trying to compete on one dimension only. Our customers look at multiple dimensions. We are the only one delivering across all dimensions.

We have been able to deliver on original 2025 guidance despite headwinds in China and from NIH. We see sequencing demand volume continue to expand.

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